Correlation Between Armada Hflr and KEYBANK

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and KEYBANK at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Armada Hflr and KEYBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Hflr Pr and KEYBANK NATL ASSN, you can compare the effects of market volatilities on Armada Hflr and KEYBANK and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Armada Hflr with a short position of KEYBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and KEYBANK.

Diversification Opportunities for Armada Hflr and KEYBANK

-0.32

Correlation Coefficient

Armada Hflr  KEYBANK

Very good diversification

The 3 months correlation between Armada and KEYBANK is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and KEYBANK NATL ASSN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYBANK NATL ASSN and Armada Hflr is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Armada Hflr Pr are associated (or correlated) with KEYBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYBANK NATL ASSN has no effect on the direction of Armada Hflr i.e., Armada Hflr and KEYBANK go up and down completely randomly.

Pair Corralation between Armada Hflr and KEYBANK

Considering the 90-day investment horizon Armada Hflr is expected to generate 1.26 times less return on investment than KEYBANK. In addition to that, Armada Hflr is 2.91 times more volatile than KEYBANK NATL ASSN. It trades about 0.03 of its total potential returns per unit of risk. KEYBANK NATL ASSN is currently generating about 0.11 per unit of volatility. If you would invest  8,810  in KEYBANK NATL ASSN on September 19, 2024 and sell it today you would earn a total of  979.00  from holding KEYBANK NATL ASSN or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.41%
Values	Daily Returns

Armada Hflr Pr  vs.  KEYBANK NATL ASSN

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

KEYBANK NATL ASSN

Risk-Adjusted Performance

6 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KEYBANK NATL ASSN are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KEYBANK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and KEYBANK

The main advantage of trading using opposite Armada Hflr and KEYBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, KEYBANK can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KEYBANK will offset losses from the drop in KEYBANK's long position.

The idea behind Armada Hflr Pr and KEYBANK NATL ASSN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .